Middle East The Big Sting

By Jill Smolowe

Smaller than a soda can and with a sticker price of about $200, a capacitor hardly appears lethal. Its industrial applications range from use in copier machines to air-conditioning units to aerospace equipment. But take a highly miniaturized capacitor capable of storing 5,000 volts, feed it into a peanut- size switch called a krytron, and the result is a device that can be used for the deadliest purpose of all: triggering a nuclear explosion.

Atomic weapons were on the mind of a buyer for Iraq when he contacted a California manufacturer of capacitors in September 1988. One year later, he struck a deal for 40 capacitors powerful enough to detonate a nuclear blast. Last week U.S. and British customs investigators seized the cargo in a freight shed at London's Heathrow Airport and arrested four people in connection with the attempt to smuggle arms into Iraq.

Though the 18-month sting operation was brilliantly executed, the episode reminded the world that President Saddam Hussein had lost none of his fierce resolve to turn Iraq into the first Arab nuclear power. Saddam's reckless campaign also reinforced concerns about the rapid proliferation of arms in the Middle East, where, by Soviet count, the race to equip 5 million men has cost $600 billion during the past decade. As superpower rapprochement diminishes the desire of Washington and Moscow to meet the military wish list of its Middle East proteges, some of those clients are looking to achieve military self-sufficiency. The chilling result is the possibility of further nuclear proliferation.

Last week's sting operation began with a phone call to the London office of CSI Technologies, Inc., an electronics firm based in San Marcos, Calif. The inquiry came from EUROMAC Ltd., a London-based front company for the Iraqi government headed by Ali Ashour Daghir, 49, an Iraqi citizen residing in England. CSI officials were instantly suspicious of EUROMAC's specifications. "They were such that their most likely use would be for detonating a nuclear bomb," says CSI President Jerry Kowalsky. CSI contacted both the U.S. Customs Service and the CIA, and a sting was hatched.

Last September CSI arranged a face-to-face meeting with Iraqi government officials in the cafe of the Cavendish hotel on London's Jermyn Street. On one side of the table sat Daghir, Jeanine Speckman and two men introduced as Iraqi government engineers. On the other side sat Kowalsky and his manager for finance and export, "Daniel Saunders." But Saunders was actually Daniel Supnick, 38, a U.S. Customs agent.

Boasting that CSI could modify the capacitors to fit Iraq's precise requirements, Supnick asked why the devices were needed. General laser research, said the engineers. Fine, said Supnick. CSI would produce capacitors that work beautifully in lasers. Of course, he added, they wouldn't work anywhere else.

Pause. The Iraqis conferred in Arabic and then announced that the devices would be used in aerospace research.

Fine, said Supnick. At what altitude should they detonate?

Sea level, the Iraqis said.

O.K., said Supnick. The devices would explode at sea level. Of course, he added, they would not work at higher levels.

Pause. More conferring in Arabic, and as the meeting wore on, the Iraqis kept changing the specs until they fitted those of a nuclear warhead detonation capacitor. But Supnick informed them that the U.S. Government would not license the capacitors for export if the true destination, Baghdad, were revealed. The Iraqis' solution: the shipment would be described as parts for "computer-room air conditioners."

On March 19 the capacitors were flown from Los Angeles to London aboard a TWA aircraft and stored in a warehouse. (By some accounts, British officials substituted fake devices for the actual capacitors.) Nine days later, as the large wooden crate containing the cargo was about to be loaded onto an Iraqi Airways flight bound for Baghdad, U.S. and British customs officials seized the goods.

At the same time, the suspects were arrested at Heathrow. Those charged with trying to smuggle the capacitors were Daghir; Toufic Fouad Amyuni, 37, a Lebanese engineer; and Speckman, 41, a French export executive with EUROMAC. In addition, Iraqi citizen Omar Latif was arrested and deported to Baghdad. Latif, ostensibly an official with the state-owned Iraqi Airways, was believed to be the head of Iraq's intelligence network in Britain. The next day, the U.S. district court in San Diego unsealed an indictment that charged two British-based companies and five people, among them Daghir and Speckman, with conspiracy to export defense articles.

Predictably, Iraq denied any involvement and maintained, as it always has, that Baghdad is not involved in the development of nuclear weapons. At the same time, Baghdad officials asserted that Iraq reserves the right to secure advanced technology. Saddam fumed publicly that enemies were trying to halt Iraq's "march on progress." But those obstinate words seemed only to confirm Saddam's intent to build a nuclear bomb. Not that he is very close to the goal: most experts believe that Baghdad is still several years away from realizing its dream. "They're smuggling detonators when they don't have anything to detonate," says Stan Norris of the Natural Resources Defense Council.

There is no doubt that Iraq possesses missiles capable of delivering warheads, nuclear or otherwise. Customized Scud-B surface-to-surface missiles were fired during the Iran-Iraq war, among them 190 Al-Husayn missiles, with a range of 400 miles. Last December, Iraq test-fired two surface-to-surface missiles with a range of 1,240 miles. That same month, Iraq announced it had launched a 48-ton rocket capable of carrying satellites into space. If true, that means that Iraq is capable of putting ballistic missiles into space.

According to Israeli intelligence officials, Saddam ordered a crash program in 1987 to develop nuclear weapons. The Iran-Iraq war was then in its seventh year, and Saddam may have had Iran in mind as his first target. Baghdad already had in place a network of front organizations around the world that purchased materials for ballistic surface-to-surface missiles, chemical weapons and satellites. The Iraqis had even secured $3 billion in unauthorized loans from the Atlanta branch of Italy's Banca Nazionale del Lavoro to finance the purchase of industrial products in the U.S. The Iraqis also possessed about 25 lbs. of enriched uranium salvaged from the Osirak nuclear reactor, which was destroyed by Israeli warplanes in a surprise raid in June 1981.

Saddam learned his lesson well: Israeli officials say the Iraqis are now working on the components of an atom bomb at half a dozen underground sites around the country. "We are worried, very worried," says an Israeli government minister. "But what is the point in talking about it? If we are going to do something to them, we should naturally keep it secret."

In an effort to arouse world alarm and perhaps justify another pre-emptive strike, Israel, which is believed to possess nuclear weapons, may be exaggerating Iraq's progress toward building an atomic bomb. Nonetheless, Western arms experts fear that in his drive to dominate the region, Saddam is capable of almost any atrocity. The execution three weeks ago of British- based, Iranian-born journalist Farzad Bazoft shocked the world. But the hanging surprised few Iraqis, who have become accustomed to Saddam's cruel brand of justice, which sanctions men's killing adulterous mothers, wives or daughters. Known as the "Butcher of Baghdad," Saddam lived up to his name in March 1988 when his military dropped chemical bombs on Kurds in the northern Iraqi town of Halabja, killing hundreds of people.

Meanwhile, arms proliferate throughout the Middle East. Last week Libya successfully tested a system to refuel fighter-bombers in midflight, thus improving Tripoli's ability to attack Israel. In Beijing witnesses photographed a heavily guarded convoy of flatbed trucks carrying a total of 26 short-range missiles toward the port of Tianjin. Although it cannot be proved that the missiles are destined for the Middle East, it is feared that they are intended for delivery to Syria or Iran.

Despite all this, the international response was largely muted. After the sting, British authorities considered breaking off diplomatic relations with Iraq, then chose not to, concerned that such a move might harm two British prisoners being held in Iraq. In Washington President George Bush called upon suppliers "to exercise special restraint" in the export of nuclear, chemical, biological and ballistic weapons. Iraq has had little trouble acquiring arms and component parts from countries in Europe, South America, North America and Asia.

The superpowers and Europeans may now be persuaded to renew efforts in Geneva to halt the spread of nuclear and chemical weapons. But the sad fact is that rulers like Saddam, whose country has already signed the nuclear nonproliferation treaty, operate outside international law. And thus it is only a matter of time before someone as single-minded as Saddam acquires the ability to annihilate a foe with atomic weapons.

CHART: NOT AVAILABLE

CREDIT: TIME Chart by Joe Lertola

CAPTION: CAN BAGHDAD MAKE THE BOMB?

With reporting by Dean Fischer/Cairo, Frank Melville/London and Elaine Shannon/Washington